SEC vs Ripple: Judge Grants Request For Binance Documents; Why is it Critical for Ripple?

The recent development in the Ripple vs SEC lawsuit has come in defendant’s favor. Brad Garlinghouse’s Motion to Obtain International Discovery, i.e., Binance Documents from the Cayman Islands has been granted by the court.

#XRPCommunity #SECGov v. #Ripple #XRP Brad Garlinghouse’s Motion to Obtain International Discovery has been granted.

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) August 3, 2021

Recently, Garlinghouse’s Counsel had submitted a Letter of Request to the court, appealing to obtain Cayman Island’s Binance documents under the Hague Convention of 18 March 1970 on taking of evidence abroad in civil or commercial matters.

The letter deemed the requested documentation as “relevant to the case and unobtainable through other means”. Additionally, the defense argued that the following, “possesses unique documents and information” particularly to the XRP lawsuit.

It is Critical for Ripple

The defendant’s counsel elaborated in its Motion to Obtain plea, that the documents would provide proof that SEC’s lawsuit against Ripple’s XRP sales is invalid under Section 5 of the Securities Act of 1933.

According to SEC’s claims, Garlinghouse sold 357 million units of XRP on “worldwide” digital asset trading platforms like Binance, to investors “all over the world”, and violated Section 5 of the Securities Act of 1933. However, the act only applies to domestic sales and offers of securities, contradictory to SEC’s claims of global violation. Therefore, SEC can only charge Ripple offering services in the US, while the majority of “overwhelming” sales according to the SEC, were on foreign lands.

“As the SEC knows, Mr. Garlinghouse’s sales of XRP were overwhelmingly made on digital asset trading platforms outside of the United States […] the discovery that Mr. Garlinghouse seeks will be relevant to demonstrating that the offers and sales that the SEC challenges did not occur in this country and are not subject to the law that the SEC has invoked in this case.”, the letter stated.

Motion to Dismiss

Binance documentation as proof for invalidating SEC’s claims under Section 5, can potentially lead to winning the motion to dismiss by the defendants. In the letter, the defense has highlighted that these documents can be used as the ground for their plea to dismissal, the majority of sales and offerings were outside the US.